Details emerge about “that” phone call.

Part of the transcript of the telephone conversation between President Trump and the Ukrainian leader was released. Following is part of what Trump was alleged to have said on the call.

“There’s a lot of talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that, so whatever you can do with the attorney general would be great.”

Hardly a smoking gun for impeachment and not likely strong enough for any of his own Republican Party colleagues to want to see him impeached on these comments. I doubt the House of Representatives will reach a 2/3’s majority to impeach him unless there is something he said on the call that has not yet been released.

RBNZ sends Kiwi Dollar higher for less than an hour.

The Kiwi Dollar initially rallied post the RBNZ statement however the move higher was very short-lived falling back below its pre-statement price within an hour. Once the US trading session got underway traders began to buy back into the safe-haven US Dollar and this resulted in the Kiwi Dollar falling back to recent September lows. The RBNZ kept its official interest rate on hold at 1% and the reason why the NZD initially rallied post the statement was that the Central Bank really didn’t deliver any concrete “new” news that more rate cuts are imminent. Traders that were short exited and some volume from investment banks keen to trade the news came for the NZD in the very short term.

The RBNZ did say in the statement. “There remains scope for more fiscal and monetary stimulus, if necessary, to support the economy and maintain our inflation and employment objectives.” If the Kiwi Dollar was going to be sold off traders wanted to see comments that gave a stronger indication another rate cut is coming soon. In essence, the statement disappointed with respect to forward guidance on what it may do on rates and when.

US Dollar spikes on safe-haven demand.

There is a good lesson in yesterday’s US Dollar price action. We saw an initial sell-off on the Presidential impeachment inquiry news and then a rally back to the safe-haven greenback on Wednesday. It’s a consistent theme we see when events similar to this week’s Trump impeachment inquiry spook markets. Keep in mind there are more US Dollars around the world than any other currency. There is more global debt denominated in US Dollars than any other currency and there is more trade between countries based in US Dollar pricing than any other currency. Therefore, when there is a significant negative financial or geopolitical event investment banks and hedge funds will always look to the safe-haven US Dollar for protection.

The greenback was a stand out performer on Wednesday because it is the worlds reserve currency.

Trump says a China trade deal could be close.

US stock indexes rallied on Wednesday following comments from Donald Trump that a trade deal with China could be coming soon. Traders halted their buying of the safe-haven Yen which had rallied strongly on Tuesday after the impeachment news. Trump was speaking at the United Nations and told reporters that a trade deal with China may come “sooner than you think”. According to CNBC he also said that a trade deal between the world’s third-largest economy, Japan, and the USA had been reached.

Further note on my comments about a potential market correction if Trump is impeached.

Yesterday I commented that the US stock market fell by around 20% during the impeachment proceedings of Bill Clinton back in 1998. What I did not mention is that following the not guilty verdict on perjury accusations stocks rallied back 20% and closed at time new highs before Xmas.

In other news.

New US Home Sales in the USA grew by an astonishing 7% last month and helped boost US market sentiment.

Today will see the release of US Durable Goods and US 2nd quarter GDP data both of which are high impacting economic numbers and have the potential to move the US Dollar. If the numbers beat market estimates I would expect to see increased demand for the US Dollar because it will confirm the US Fed may not lower interest rates again in October or November. My bet is they will use December as they did last year to adjust rates. In 2018 adjustment was higher but this time around it will be lower.

Exercising the right trading habits is easy, once you’ve trained your mind to be disciplined in other aspects of your life.

AB

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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The post Today’s Key Market Drivers: 26th September 2019 appeared first on LTG GoldRock.